<p>
  Momentum effect is an anomaly in nearly every market. However, if a stock in the winner group is in the final stages of overreaction, it is not the best long opportunity because of the high probability of its reversal, and therefore profit reduction. Similarly, in the loser group, a stock which is in the final stages of overreaction is also not the best short opportunity because its reversal would lower the profit of short selling within a short time. Based on this logic,
  this momentum-reversal strategy seeks to buy winners and sell losers that are less likely to be in the final stages of overreaction.
</p>
